Endochondral bone formation is complex and requires the coordination of several signals. Defects in the regulation of chondrocyte differentiation can result in chondrodysplasias and osteoarthritis. Factors that coordinate the formation of endochondral bones are just beginning to be defined. The long-term objective of this study is to understand, at the molecular level, the signals involved in the regulation of endochondral bone formation and how alterations in these signals contribute to diseases of the skeletal system with emphasis on the mechanism of action of members of the Transforming Growth Factor-beta (TGF-beta) superfamily. Members of the TGF-beta superfamily are secreted growth factors that regulate many aspects of growth and differentiation. Expression of a dominant-negative form of the TGF-beta type II receptor in mouse skeletal tissue results in increased terminal chondrocyte differentiation and osteoarthritis, suggesting TGF-betas act to regulate chondrocyte differentiation in vivo. During the previous granting period we used an embryonic metatarsal organ culture model, which can be easily manipulated, to dissect out interactions between specific signaling cascades. Our studies suggested that the perichondrium mediates the effects of TGF-beta on both the exit of chondrocytes from the cell cycle through an unknown factor, and their subsequent differentiation through the Indian Hedgehog-Parathyroid Hormone related Peptide feedback loop. Based on these observations and potential clinical significance to chondrodysplasias and osteoarthritis, studies to determine the mechanistic basis of how TGF-beta regulates cartilage differentiation will continue through the following Specific Aims: (1) to test the hypothesis that TGF-beta2 acts in a negative feed back loop with Ihh and PTHrP to regulate hypertrophic differentiation; (2) to determine if differentially modified forms of Hedgehog proteins regulate specific aspects of endochondral bone formation; (3) to test the hypothesis that TGF-beta acts on the perichondrium through the Insulin-like Growth Factor (IGF) and/or Fibroblast Growth Factor (FGF) signaling systems to regulate chondrocyte proliferation; and (4) to determine the role of TGF-beta signaling directly in chondrocytes using conditional deletion of the TGF-beta receptor in transgenic mice. The results of these studies will enhance our understanding of molecular events involved in development and maintenance of the skeletal system. [unreadable] [unreadable]